Discover Financial Services’ Revenue Breakdown (2016-2022)

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This statistic highlights Discover Financial Services’ Revenue Breakdown, split across Net Interest Income, Discount/Interchange Revenue, Rewards Cost, Discount and Interchange Revenue (net), Loan Fee Income, Protection Products Revenue, Transaction Processing Revenue, Unrealized Gains on Equity Investments, and Other Incomes, reported on a quarterly basis from Q1 2016 onwards.
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This statistic highlights Discover Financial Services’ Revenue Breakdown, split across Net Interest Income, Discount/Interchange Revenue, Rewards Cost, Discount and Interchange Revenue (net), Loan Fee Income, Protection Products Revenue, Transaction Processing Revenue, Unrealized Gains on Equity Investments, and Other Incomes, reported on a quarterly basis from Q1 2016 onwards.

Discover Financial Services’ Revenue Breakdown

Disaggregated Revenue Q3 2020 Q2 2021 Q3 2021 Contribution in Q3 2021
Net Interest Income $2,265.00 $2,299.00 $2,405.00 54%
Discount/Interchange Revenue $752.00 $937.00 $988.00 22%
Rewards Cost $514.00 $598.00 $689.00 15%
Discount and Interchange Revenue (net) $238.00 $339.00 $299.00 7%
Loan Fee Income $100.00 $105.00 $121.00 3%
Protection Products Revenue $44.00 $43.00 $43.00 1%
Transaction Processing Revenue $50.00 $58.00 $58.00 1%
Unrealized Gains on Equity Investments —- $729.00 -$167.00 -4%
Other income $17.00 $6.00 $18.00 0.4%
Total $3,980.00 $5,114.00 $4,454.00 100%

(All figures in millions, except percentages)

The total revenue generated in Q3 2021 was $4,454 million, which indicates an increase of 12% on a year-on-year basis, from Q3 2020, in which the revenue generated was $3,980 million. On the quarter-on-quarter basis, revenue in Q3 2021 decreased by $660 million, or 13%, as compared to $5,114 million in Q2 2021.

Discover Financial Services’ revenue can be bifurcated into the following:

Net Interest Income

Net interest income highlights the difference between interest income earned on interest-earning assets and the interest expense incurred to finance those assets. Net interest income increased from $2,265 million in Q3 2020 to $2,405 million in Q3 2021, marking a growth of 6.2% on a yearly basis. It also grew by 1.5% as compared to $2,299 million in Q2 2021, on a quarterly basis. About 54% of the company’s total revenue is driven by Net interest income segment during Q3 2021.

Discount/Interchange Revenue

Discount/Interchange revenue witnessed an incline from $752 million in Q3 2020 to $988 million in Q3 2021, marking an incline of 31.4% on a yearly basis. In addition, it also grew by 5.4% as compared to $937 million in Q2 2021, on a quarterly basis. Discount/Interchange revenue accounts for 22% of the company’s total revenue for Q3 2021.

Rewards Cost

Rewards Cost contributed 15% to the total revenue generated in Q3 2021. Rewards costs increased from $514 million in Q3 2020 to $689 million in Q3 202. This was a growth of 34% on a yearly basis. Furthermore, it increased by 15.2% as compared to $598 million in Q2 2021, on a quarterly basis.

Discount and Interchange Revenue (net)

Discount and Interchange Revenue (net) increased from $238 million in Q3 2020 to $299 million in Q3 2021, witnessing a growth of 25.6% on a yearly basis. However, it decreased by 11.8% as compared to $339 million in Q2 2021, on a quarter-on-quarter basis. Discount and Interchange Revenue (net) comprises 7% of the company’s total revenue in Q3 2021.

Loan Fee Income

Income from Loan Fee amounts to $121 million in Q3 2021, indicating a growth of 21% as compared to $100 million in Q3 2020, on a yearly basis. However, it decreased by $16 million, or by 15.2% as compared to $105 million in Q2 2021, on a quarterly basis. This revenue segment comprises 3% of the total revenue in Q3 2021.

Protection Products Revenue

Production Products revenue remains constant throughout. It amounts to $43 million in Q3 2021, which was an increase of 2.3% as compared to $44 million in Q3 2020, on a yearly basis. Production Products revenue was the same for Q2 2021 as of the latest quarter. It comprises only 15% of total revenue in Q3 2021.

Transaction Processing Revenue

Transaction Processing revenue witnessed an increase from $50 million in Q3 2020 to $58 million in Q3 2021. This was a growth of 16% on a yearly basis. However, it remained constant on a quarter-on-quarter basis. It accounts for only 1% of the company’s total revenue in Q3 2021.

Unrealized Gains on Equity Investments

Unrealized Gains on Equity Investments were negative, i.e., -$167 million for the period Q3 2021. This was a huge decline of 123% as compared to $729 million in Q2 2021, on a quarterly basis. Besides, gains on equity investment were nil for Q3 2020. This source of revenue comprises -4% of total revenue in Q3 2021.

Other Income

The other income stood at $18 million in Q3 2021. It increased by only $1 million, or by 5.8%, as compared to $17 million in Q3 2020 on a yearly basis. In addition, it increased by 200% quarterly as compared to $6 million in Q2 2021. The contribution of other income is almost negligible.

About Discover Financial Services 

Founded in Delaware in 1960, Discover Financial Services is a digital banking and payment services company, providing digital banking products and services, and payment services through its subsidiaries. It operates the Discover Network, the PULSE network, and Diners Club International, collectively known as the Discover Global Network. The company offers their customers credit card loans, private student loans, personal loans, home loans, and deposit products. Discover Cards is the third largest credit card brand in the United States. It is traded on the NYSE under the ticker DFS.

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